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1988 – Siemens becomes world’s first manufacturer to supply customer samples of a four-megabit DRAM chip
At the beginning of the 1970s, the transition from analog to digital technology in all areas of electrical engineering was making enormous strides. As digitization proceeded, ever-larger memory capacities were required to process programs and data. The chip market exploded. Every three years, chip capacity quadrupled and new, more powerful and cheaper chip generations hit the dynamically growing market. In 1984, technology had developed to the point that it was possible to produce megabit chips – that is, chips boasting over a million binary memory cells and capable of storing around 64 pages of text.
At that time, however, the European microelectronics industry was more than two years behind its Japanese and American rivals. To erase this lead was the aim of the MEGA Project. Armed with government support, Siemens and Philips joined forces to close the gap to the world leaders. Siemens’ goal: to produce so-called four-megabit dynamic random access memory (DRAM) chips, memory chips that could store four million bits.
To reach its target, Siemens made a fundamental change. For the first time, serial planning – research, development, production – was abandoned and a factory designed for products that had not even reached the development stage. To meet the demands of the highly dynamic chip market, which was dominated by price wars and harbored enormous risks, such parallel, networked planning was urgently required. Because – in an environment of steadily rising research expenditures – prices for each chip generation were falling by 90 percent within only a two-year period. In this situation, even small delays could cause enormous financial loses. For this reason, Helmut Lohr, head of SEL, warned against joining the bitter price war between the U.S. and Japanese manufacturers and recommended instead that companies buy memory chips as cheaply as possible on the world market.
Siemens took a different view. Under President and CEO Bernhard Plettner, the company had already been transformed from an energy to an electronics company in the 1970s. Starting in the 1980s, Plettner’s successor, Karlheinz Kaske, forcefully continued Siemens’ drive into the area of microelectronics. Behind this approach was the strategic idea that only a company with the best chips could market the best high-tech products. In addition, memory chip development was viewed as a key door-opener to the development of much more interesting processor technology, which the company intended to maintain and further expand as a core competency. Against this backdrop, the MEGA Project was unanimously approved by the Managing Board on February 6, 1984. Key elements of the project included a focus on development work and the construction of two development halls for one- and four-megabit chips at the company’s research center in Munich-Perlach, Germany, the expansion of production capacities in Regensburg, Germany, and the recruitment of more than 100 new engineers. Plans called for investing DM 1.4 billion in the project over a five-year period.
The first milestone was reached in 1987. In cooperation with Toshiba, Siemens became the first company in the western world to begin series production of one-megabit chips. Sales of the new chips, which were manufactured in Regensburg, were excellent. This cooperation was, of course, controversial. The Europeans had originally wanted to drive development on their own. The year before, however, the microelectronics market had become much tougher due to sharp price declines. The pace had intensified.
After overcoming a wide range of difficulties, the company finally succeeded in producing a lab prototype of a four-megabit chip in the summer of 1988 – well ahead of schedule. The employee magazine Siemens Mitteilungen reported proudly: “In December, some 400 employees of the MEGA Project gathered for Bavarian snacks at the Munich-Perlach location. […] They were celebrating the successful conclusion of the MEGA Project and joining the ranks of our global competitors in the area of microelectronic technology.” However, the company only began series production in 1989, a year behind its Japanese competitors.
Nonetheless, Hans Günter Danielmeyer, the company’s Chief Technology Officer at the time, regarded the MEGA Project as a net gain: it marked the start of a new type of cooperation between Siemens’ research, development and production activities. Driven by the power of the market and ever-shorter production cycles, collaboration between employees would become increasingly vital. Technical expertise would no longer be enough. Only close integration would allow the company to react quickly to fast-changing customer requirements and, at the same time, cut costs. Hence, the MEGA Project was not only a source of technological progress. It also provided a model for Siemens’ further development going forward.
Mai 14, 2012 – Dr. Franz Hebestreit
Further reading
50 Jahre Zukunft. Der Weg vom Regensburger Siemens Bauelementewerk zum Innovationsstandort der Infineon Technologies AG, Gerd Otto, Kurt Rümmerle, Hermann Jacobs (eds.). Regensburg 2009 (available in German only)